El acontecimiento como paradoja de la verosimilitud de la imagen

Advocates of corporate-style financial statements insist that such statements help executives and managers make better decisions and manage better. As established in Chapter I, the goal of the CFO Act (and subsequent GMRA) is to ensure that performance information (including financial) is both useful and used in decision making. To ensure that performance information will be both useful and used, it must meet the needs of various users for completeness, accuracy, validity, timeliness, and ease of use (Dodaro, 2011). Obtaining a clean audit opinion, which 21 of the 24 CFO agencies have done, presumably satisfies the requirements for completeness, accuracy and validity. What remains is the question of timeliness and ease of use. OMB Comptroller Linda Combs testified that the CFO Council and the President’s Council on Integrity and Efficiency “will work together… to determine… if the data are timely and in the right format for decision making” (Combs, 2007, p. 5).

B. FINDINGS TO DATE

There is little literature directly concerned with the topic of users and uses of corporate-style financial statements within the federal government. A common thread

among the existing literature is that there appears to be an absence of well-defined internal users or uses of the financial statements within the CFO agencies. From the beginning, Jones and McCaffery (1993) asserted, “Notwithstanding the experience of a few agencies with audited financial statements, their practical utility has not yet been proven…“ (p. 71). Now, nearly 20 years later, those same sentiments are still being echoed by organizations within the federal financial management community.

1. GAO

According to GAO (2008), an assessment of the 24 CFO agencies for fiscal year 2007 “illustrate that many agencies still do not have effective financial management systems, including processes, procedures, and controls in place that can routinely produce reliable, useful, and timely financial information that federal managers can use for day- to-day decision-making purposes” (p. 3).

As recently as 2011, GAO has still been unable to establish a concrete link between financial reports and decision making within many federal agencies. According to a recent report released by GAO (2011a), “the IRS continues to face challenges in developing and institutionalizing the use of financial information to assist it in making operational decisions and in measuring the effectiveness of its programs” (p. 16). The question then arises, “Are the financial statements a part of this financial information, or are they merely products of the same financial systems and processes that produce this financial information?”

2. AGA

A 2005 AGA survey reports that some interviewees of the CFO community “pointed out that customers simply do not value, much less read, the information in financial statements” (AGA, 2005, p. 18). Two years later, another AGA (2007) report finds that, on a scale of 1 to 7, financial executives gave the value of data in federal financial statements to making business and program decision a score of only 2.7. According to one interviewee, “financial statements are only important to the CFO and do not register high [with] the agency administrator or Congress …. Financial statements

AGA’s most recent annual survey of federal CFOs finds further dissatisfaction regarding the current model of annual financial reporting. Its results indicate that the financial system produces information that few consider relevant or useful, so that the current financial statements have little value (AGA, 2011). Some of the suggestions given by federal financial executives for changing the financial reporting model are most telling:

 Break information down by projects and programs, which would produce

information of more value to program managers (and citizens).

 Report the information that stakeholders say they want.

These statements seem to endorse the practitioners’ perspective presented above—that the financial statements are not directly useful in decision making. At a minimum, they suggest a deeper examination of users and uses of financial statements is warranted.

3. CFO Council

According to the CFO Council and the CIGIE (2011), the CFO Act (and subsequent GMRA) “improved the quality of financial information and financial reporting… [and] have contributed to the evolution of reliable, timely, and useful financial information in the Federal government. The preparation of audited financial statements assists CFOs and agency leadership in assessing and mitigating enterprise risk” (p. 12). This statement implies that it is the process of creating these corporate-style financial statements, and not the statements themselves, which currently has value within the federal government.

Regarding the issue of users, the CFO Council and the CIGIE (2011) found that, The demand by stakeholders for financial reporting beyond the principal financial statements has also evolved... Analyzing financial statements requires an in-depth understanding of government accounting principles, and most financial and performance reports contain details that may only appeal to the financial management community. In the continuing quest to improve government financial reports and ensure data accuracy, the financial management community should increase efforts to make

financial information more relevant to all of its stakeholders, including decision-makers, program managers, and the public. (p. 4)

4. Others

David Walker, former U.S. Comptroller General, in testimony to Congress noted that,

By the end of my term as Comptroller General, I would like to see the civilian CFO Act agencies routinely producing not only annual financial statements that can pass the scrutiny of a financial audit, but also quarterly financial statements and other meaningful financial and performance data to help guide decision makers on a day-to-day basis. (GAO, 2007, p. 26)

This stated need for other products (e.g., quarterly financial statements) implies that the annual statements do not provide all the useful information necessary to internal users. Brook (2010) sums it up when he states, “[T]he uses and usefulness of improved financial information for non-financial managers in the federal government seem to be somewhat limited” (p. 63).